CULTURE, MEDIA AND SPORT COMMITTEE

Tuesday
19 May 2009

SIR ANTHONY CLARKE and LORD JUSTICE SIR RUPERT JACKSON

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Transcribed by the Official Shorthand Writers to the
Houses of Parliament:

Chairman: Good morning. This is a further session of the Committee's
inquiry into press standards, privacy and libel, and we are concentrating particularly
today on the making and implementation of the law. I would, especially, like to welcome our
witnesses this morning, the Master of the Rolls, Sir Anthony Clarke, and Lord
Justice Jackson; we are extremely grateful to you for coming. I might just add at this point that none of
us on the Committee is a lawyer, so be patient with us on subjects of law.

Q918 Mr
Evans: Conditional fee agreements were introduced to
improve access to justice for both defendants and also for the claimants. Do you think it is working?

Sir Rupert Jackson: Well, undoubtedly,
conditional fee agreements under the present regime are effective in terms of
promoting access to justice for claimants. There is a concern that the balance which has
been struck by the present regime is far from satisfactory and, if you would
like me to explain in a couple of sentences why, I will. The rationale of the present CFA regime,
under which success fees and ATE premiums are recovered from unsuccessful
defendants, is as follows: if you take a cohort of cases, a block of cases
brought on conditional fee agreements with ATE insurance, some cases, indeed
most cases, won, as is the way of things, but some lost and, if you look at the
overall financial position, once the success fees and the ATE premiums have
been paid to claimant solicitors in the won cases and the ATE insurers have
paid out costs in the lost cases, the overall effect is that the entire costs
of all those cases are borne by the defendants and the claimants bear no costs
whatsoever. In other words, litigation
of this character has the entirety of the costs placed upon one side only. Now, that is the theory. When you come to the practice, there is evidence
that more than the entire costs of the litigation is borne by the
defendants. First of all, even if the
ATE premiums are calculated with precise accuracy, they must include an extra
element to cover the administration costs of the insurers and, on top of that,
they must include an element of profit for the ATE insurers. That is all that happens, if the system
worked to perfection. There is evidence,
however, that ATE premiums are too high because there is no effective market
force to control the ATE premiums paid by claimants to the insurers because
claimants have no direct interest, they are never going to pay the premiums,
win or lose. There are also suggestions
in some of the evidence which I have seen that success fees are too high and do
more than compensate the claimant lawyers for the cases which they lose. Now, this is a matter of controversy and it
is something which I am looking into in my inquiry. There is, however, a growing body of evidence
which suggests that the present CFA and ATE regime, which is of course
satisfactory for claimants, and one must not lose sight of access to justice, also
has the consequence that significantly more than the entire costs of the
relevant litigation is cast upon the defendants. As you know, Mr Chairman, I have been tasked
with reviewing the costs of civil litigation this year and to make
recommendations to promote access to justice at proportionate costs, and this
is a matter which I am looking into.

Sir Anthony Clarke: Can I just add that I agree
with that, but the other point I would like to make, which is a point I made in
the paper which I have submitted, is that the problems relating to CFAs are
problems which cover the whole range of litigation, if you like, and I know
that the focus of the Committee is on the effects on the media of CFAs and the
way they have worked in media cases, but very similar problems arise across the
board and we are somewhat concerned that there may be a desire to go in for
piecemeal reform in one area before Rupert Jackson has finished his inquiry so
that we can see what the problem is and what the possible solutions are across
the whole piece.

Q919 Mr
Evans: The Committee has heard that some claimants,
such as the supermodel Naomi Campbell, have used a CFA in order to sue media
organisations, even though they could afford to do so themselves without one,
so should means-testing be introduced?

Sir Rupert Jackson: The House of Lords considered
this issue in the case of MGN v Campbell. The House of Lords came to the conclusion that
the legislation passed by this House entitles anyone to make use of the CFA
regime. The House of Lords also came to
the conclusion that means-testing for the purpose of CFAs was not practicable. As the Master of the Rolls said, it is very
important to look at the problems of costs holistically. There are serious issues concerning the costs
of defamation proceedings and there are very serious issues concerning the
costs of the whole of civil litigation, which is why the Master of the Rolls
has taken me out of sitting for a year in order to address them, and I do
endorse the point which Sir Anthony Clarke has made that we must deal with this
problem in principle and across the board and, if I may respectfully suggest it
to Members of this House, not embark on piecemeal reform for one tiny part of
the civil litigation terrain which may perhaps have a slightly more vocal
presentation than others.

Q920 Mr
Evans: So you are not looking, at the moment, at the
possibility of having legal aid for cases of defamation?

Sir Rupert Jackson: Well, legal aid has never
been available for defamation, and one of the effects of the reforms introduced
by Parliament in 1999 was that legal aid becomes available for an even narrower
area of civil litigation. All the
indications which I have received are that there is no realistic prospect of
legal aid being expanded either to the boundaries which it occupied up to 1999
or, and more expensively, as Mr Evans posits, to include defamation as
well. It seems to me that I have got to
conduct my present review upon the assumption that legal aid is not going to be
made more widely available and, given the present state of the economy, that is
probably a safe assumption.

Sir Anthony Clarke: If I could just add a footnote to that in relation
to your question, if there are problems with CFAs, they are the problems or the
question of whether success fees should be recoverable from the defendant; it
is not the CFA itself which is the problem.
The problem arises when one asks whether it is just that a percentage of
the success fee, which may be 100% of the base costs which include profit
costs, should be recoverable from the defendants, and that is a problem which
arises starkly in a case like the Campbell case
which the House of Lords decided on.

Q921 Chairman:
But
you will appreciate that this Committee is essentially concentrating on libel
and that is the topic of our inquiry, and I just wanted to clarify
something. You are suggesting that, by
looking at the broader range of all civil litigation, the problems which we
have received evidence about in relation to libel cases are actually not, by
any means, unique to libel cases, but they are problems that are now occurring
right across the range of civil litigation?

Sir Rupert Jackson: Yes.

Q922 Chairman:
Therefore, with the particular concern which
we have, which is the potential 'chilling' effect on journalism, do you hear
complaints that there are similar adverse consequences affecting other areas of
law?

Sir Rupert Jackson: Yes. I shall make recommendations in my report
later this year which, I hope, will address these problems both in relation to
defamation or publication proceedings and also in relation to the entirety of
civil litigation. Perhaps I may just say
a word about the task which I am engaged in.
I have been asked to review the rules and principles governing the costs
of civil litigation and to make proposals to promote access to justice at
proportionate costs. My terms of
reference require me to look at the procedural rules where procedures might be
changed to prevent such substantial costs being incurred, to compare our regime
with regimes overseas, to review academic material, meet interest groups and so
forth and to look at the whole of this area from first principles. I am conducting this inquiry in three
stages. The first stage is to identify
the facts, identify what costs are being incurred in different categories of
litigation, identify the positions of different interest groups, review the
literature and so forth and to look at overseas regimes. I have completed the first stage, as planned,
in the first four months of this year and, Mr Chairman, I believe that you and
your colleagues have received copies of my preliminary report. This is not a report which comes to conclusions,
it is a report which sets out the evidence, the issues and the competing
arguments. I am not a politician, I am a
judge and I am conducting my inquiry, as best I can, in a judicial manner,
which is, first, to identify the facts and the evidence and then I embark on a
consultation period which begins this month.
During the consultation period, I hear what everyone has to say about
the matters raised in my preliminary report, I am holding public seminars, meetings
with many interest groups and so forth, and then I shall make the final report
with my recommendations in the autumn.
It is very important that I keep an open mind both during phase one when
collecting the evidence and during phase two when I hear the arguments, so I am
not, Mr Chairman, going to propose any magic solutions today, but I can assure
you that I am very much alive to the issues which concern all areas of
litigation. In my preliminary report, I
deal with the costs of defamation proceedings in chapter 37 and I have an
appendix, which is appendix 17, which sets out the costs of claims resolved by
settlement or judgment in defamation or publication claims against the media in
2008. This material was very kindly
provided to me by the Media Lawyers' Association and I hope that the members of
this Committee will find the data in appendix 17 to be helpful. You can see that conditional fee agreements
were entered into in about 17% of the cases, you can see set out what the costs
of each side were and what the damages are, and I have put some notes at the
top of the schedule which explain the details of the figures, so I very much
hope that this Committee will find appendix 17 helpful. If it would help the Committee to look at the
problems of defamation costs in the wider context, you will be able to look at
costs in other areas of litigation in the numerous other appendices to the
report and I have set out the issues, as best I can, in the surrounding
chapters, although chapter 37 is specifically focused on defamation.

Q923 Chairman:
I note
that, of the 154 cases in appendix 17, three went to trial.

Sir Rupert Jackson: Yes.

Q924 Chairman:
And
they were all won by the claimant.

Sir Rupert Jackson: Yes.

Q925 Chairman:
One
of the things which has been put to us in relation to CFAs is that, I think it
was, 98% of the cases which were CFAs were won by the claimant and their
solicitors who had the CFAs.

Sir Rupert Jackson: It appears, from the evidence
which I have received, that claimants are successful in a very high percentage
of defamation cases. The evidence which
has been supplied to me does not enable me to give you a precise percentage; it
is something I would have been delighted to receive, but none of the parties on
either side of this particular divide has furnished me with evidence which enables
me to confirm or contradict the 98%. I
would be surprised if it is that high, but it is certainly a high percentage.

Q926 Janet
Anderson: We have heard some evidence about the level of
charges in cases involving CFAs. Do you
think the level of charges in these cases is out of control?

Sir Rupert Jackson: Well, first of all, the
hourly rate charged by solicitors can be challenged by the losing party on
assessment and, if there is a detailed assessment, that will be dealt with by a
costs judge in the Supreme Court Costs Office.
I say that because the vast majority of defamation claims are tried in London and, therefore, it
will be one of the costs judges here who deals with it. This Committee can have confidence in the judgment
of the costs judges in dealing with hourly rates. There is a new committee set up, the Advisory
Committee on Civil Costs, chaired by Professor Stephen Nickell, an economist at
Oxford, who is
currently looking into the guidelines rates and, no doubt, the results of his
work will be of assistance to the costs judges who are doing detailed
assessments. One firm of claimant
solicitors has provided to me, in confidence, details of the hourly rates which
they charge, and clearly I cannot furnish that information to the Committee as it
is confidential, but the material supplied to me indicates hourly rates
distinctly lower than figures which have been bandied around in some of the
documents.

Sir Anthony Clarke: I agree with that. I still feel myself that the area of concern
is the percentage success fee aspect of the CFAs; that is my impression really
across the board. One of the things
which is somewhat disappointing is that there is not, so far as I know, any
research which anybody has conducted. The
Government, for example, has never conducted any research, so far as I am
aware, into the underlying question of whether it is necessary for solicitors
to charge success fees and, if so, at what level. The justification of it is said to be that
they need to do that in order, if you like, to pay for the cases that are
lost. Well, one might think there would
be a great deal to be said for some detailed research into the number of cases
that are lost and the whole profile, but, as far as I know, and I am sure
Rupert Jackson will tell me if this is wrong, no one has ever conducted any
public research into that which, to my mind at least, is a great pity. That is right?

Sir Rupert Jackson: It is correct, yes.

Q927 Janet
Anderson: Do you think that, if success fees and ATE
insurance became irrecoverable, damages would have to increase to compensate
for that?

Sir Anthony Clarke: Well, it is certainly
something to be considered.

Sir Rupert Jackson: I am looking at the question
of whether success fees and ATE premiums should be recoverable at all in any
area of civil litigation, and that, for your reference, is discussed in chapter
47 of my preliminary report. If success
fees and ATE premiums become irrecoverable, then one has to look at the
position of claimants. So far as the ATE
aspect is concerned, one issue which I must consider is whether there should be
a restriction on the claimant's liability for costs because, if the claimant's
liability for costs were substantially curtailed, the need for ATE insurance in
respect of adverse costs would go, and I have done some calculations which are
set out in the report which show that defendants would be significantly better
off if there were one-way cost-shifting and they never got costs at all when
they won, so that is one issue. So far
as the success fee is concerned, if the success fee is irrecoverable, then it
would have to come out of the damages.
Now, the deductions from damages raise important policy issues which
vary from one part of litigation to another.
If you take defamation proceedings, the claimant's main concern is to
have his or her reputation vindicated, and this Committee may think that it
would be no great hardship to a claimant in defamation proceedings to lose a
significant portion of his or her damages by way of deduction for the success
fee because the claimant would still retain some damages and the claimant's
reputation would have been vindicated.
When one comes to the area of personal injuries, however, deductions
from damages become much more problematic because, very often, a large part of
the damages relates to future care, and I do not think anybody would want a
deduction from that. I hope the
Committee will forgive me if I say that the question of transferring the burden
of the success fee from defendant to claimant is one which raises difficult
issues in different parts of civil litigation, and these are issues with which
I am grappling, but those issues are less worrying in defamation than in other
areas. As to whether or not damages
should go up, it seems to me that damages for defamation ought not to go up
unless personal injury damages go up.
The convention has now been established that defamation damages should
be kept proportionate to personal injury damages because it is offensive that
an individual should receive greater compensation for hurt to his reputation
than for injury to his body. Now, there
is a related question of whether personal injury damages should go up, as
recommended by the Law Commission ten years ago, but not yet implemented, and
there is a related question to that which is whether it might be affordable if
the costs of personal litigation can be controlled or brought down. These are issues, all of which I am looking
at, which are a long way from defamation, but, if I may respectfully say so,
they illustrate the importance of looking at these costs issues holistically
and not introducing urgent reform or immediate reform now when a comprehensive
review is due later this year.

Q928 Philip
Davies: On this, I was interested, Sir Anthony, in
your point about the purpose of the success fee which is, in effect, to cover
the costs of the ones that you lose.
Now, I acknowledge that we have not got the exact figures, but, if the
figures are anywhere near to the suggestion that 98% of these cases are being
won by the claimant, would that indicate that success fees are not justified?

Sir Anthony Clarke: Well, it would certainly be a
factor. I still think that more detailed
research is required, but it would certainly be an indicator to that. The other thing to bear in mind, however, in
relation to the notion that claimants always win is that one way a defendant
can protect himself, whether a defamation or any other, is to make, what we
call, a Part 36 offer to settle the proceedings so that, if the claimant does
not beat the offer, then, from the moment of the offer, the claimant will be
expected to pay the defendant's costs, which is quite an important factor, to
my mind, in thinking about all this.

Q929 Philip
Davies: Because it seems to me, from listening to what
you have said, that success fees may be justified if lawyers were taking on
fifty-fifty cases under CFAs, but I get the distinct impression from the
evidence that we have heard throughout this inquiry that, in effect, lawyers
are only taking on as CFAs those cases which they think are absolute racing
certainties and they are, in effect, therefore, getting paid double for the
simplest cases to prosecute, which, to a layman like me, seems like an absolute
racket. Would you not accept that, if
they are being used in the sense that they are only taking on the racing
certainties under CFAs, these exorbitant success fees are just simply not
justifiable in any shape or form?

Sir Anthony Clarke: On that hypothesis, I can see
that there is something to be said for that.
The question is whether the hypothesis is correct.

Sir Rupert Jackson: If I may just come in on that
point, there is a clear body of evidence which suggests that, overall, success
fees may be bringing too great a benefit to the claimant side, but one has to
approach this evidence with caution because claimant solicitors have made the
point to me that, when a single case is lost, the costs, if that action has
gone all the way to trial, for example, may be enormous and they may need the
success fees on a substantial number of won cases in order to cover all their
outlay on the lost cases. Now, I do not
know, without the detailed research which, sadly, does not exist, precisely how
many won cases one needs in order to cover one substantial lost case, but I do
not think one should adopt too simplistic an approach to this.

Q930 Philip
Davies: Do you not acknowledge that it is quite easy
to envisage that there is a good number in this firm of lawyers where they take
on the easiest cases that they are certain to win under CFAs and then they get
paid double for the easiest cases, which seems, to me, to be perverse as you
should get paid double for the hardest cases, not the easiest cases?

Sir Rupert Jackson: Of course, the easiest cases
are the ones that are likely to settle early and, with a staged success fee, it
will be nothing like 100%. The most
difficult cases are the ones which go further and which attract a success fee
of 100%, and it must also be borne in mind that, for every case which claimant
solicitors take on on conditional fee agreements, they will have spent time
reviewing a significant number of other cases before deciding that it is not
practicable to take them on on a conditional fee agreement because the merits
are not strong enough. Therefore, the
success fees in the won cases not only have to cover the costs of those
relatively few cases which are lost, but also the costs of reviewing a large
number of cases which are not taken on and giving advice to the litigants in
those other cases. I am not here to make
out a case either for claimant solicitors or for media defendants; the
arguments on both sides have been presented to me and I have summarised them,
as best I can, in the report. I am very
much alive to the points which Mr Davies puts to me and these are matters which
I shall be addressing, but, I am afraid, I am not prepared to come to a final
conclusion of the kind which is being put to me just four and a half months
into a 12-month inquiry; that is not how judges work, although it may -----

Philip Davies: You do not have to finish
your sentence!

Q931 Paul
Farrelly: We are going to come on to the issues of
costs-capping in a moment, but may I ask a couple of questions about your very
helpful table. First of all, it would be
quite right to say, in terms of the current situation, that there is an
economic incentive that might generally lead you to conclude that 'nearly
always win, double the fee' might be the outcome of the current arrangements,
that the economic incentives are there that might lead to that situation?

Sir Rupert Jackson: I am terribly sorry, but I am
not sure I have understood your question.
Are you saying that there is economic incentive to double the fee?

Q932 Paul
Farrelly: You have said that you will not pronounce on
the evidence at the moment because you said that is not what judges do, but
economists look at incentives and the current situation with CFAs, from an
incentive point of view, might reasonably lead you to conclude that the
incentive is there which might lead to a situation where lawyers pick and
choose and it really is almost the case that it is 'nearly always win, double
the fee'.

Sir Rupert Jackson: Well, first of all, I agree
that there is an economic incentive to pick cases which, the lawyers think, are
going to win. If they proceed on any
other basis, they would go out of business very quickly if they are dealing
with cases on a conditional fee agreement.
There is, of course, that incentive there and that incentive is very
important for defendants because it means that unmeritorious and frivolous
cases are less likely to be pursued. One
of the strengths of the conditional fee agreement regime is that a filter is
created which, generally, weeds out weak and frivolous cases and that, from an
economist's point of view, is, no doubt, very important. Secondly, you say, the incentive is to double
the fee in every case because of the 100% success fee. There, I would question what you say because
the success fee only goes up to 100%, to double the fee, in those cases which
proceed some distance. In the strong
cases which are resolved quickly, there may be no success fee or a low-staged
success fee.

Q933 Paul
Farrelly: The caveat then to your argument with respect
to claimants, clearly, is one of motivation, this kind of chilling effect. If the claimant's motivation is not
pecuniary, the argument that you have advanced, that the situation helps to
protect the defendant, would be false, would you not agree?

Sir Rupert Jackson: Well, one has got to look at
two different parties within the claimant camp; there is the claimant and there
are the claimant solicitors. The
claimant's concern, clearly, is to vindicate his reputation and to recover a
sum by way of damages. The concern of
the claimant solicitors is to avoid conducting cases which will be lost and
then they will have to bear the costs themselves.

Q934 Paul
Farrelly: Can I come to your table, which is very, very
helpful to the Committee. I just
wondered whether you had any similar data, which will mean a lot more work,
from previous years so that we can establish whether there is any trend.

Sir Rupert Jackson: No, I am afraid I do not have
data from previous years. Obviously, it
would be helpful if I did have. This
report has been prepared in the space of four months and defamation litigation
is actually a very small part of the total subject and there are a huge number
of appendices dealing with costs in all sorts of areas. I took the view that the contemporaneous
evidence is the most helpful, and my appendices give a snapshot of costs being
incurred at about the present time.

Q935 Paul
Farrelly: One of the allegations that has been really
made most strongly by the media is that there are two particular firms,
Carter-Ruck and Schillings, who are serial offenders, in their terms, to the
extent that they now tout for business, encouraging people to bring claims,
particularly where the Internet is concerned, and there is a need for a
modification here. Would it be possible
for you to break down just by number of cases, not by sums or anything that
could be held to be commercially confidential, the cases where particular firms
acted for claimants and the number of cases where firms acted for defendants,
just to break it down by legal firm for us?

Sir Rupert Jackson: I cannot tell you which
solicitors firms acted either for the claimant or for the defendant in any
individual case in this schedule.

Q936 Paul
Farrelly: You do not have that information?

Sir Rupert Jackson: I do not have that
information.

Q937 Paul
Farrelly: The third question it would be very helpful if
you could answer is: could you break down these cases, not in terms of
identity, but by number, where it is foreign nationals who are the claimants or
UK
nationals? That would be helpful to the
Committee when it comes to the issue of forum-shopping.

Sir Rupert Jackson: No, I am afraid I do not have
that data.

Q938 Chairman:
Can I
just put one other point to you, which is looking at the economic
incentives. One other claim which was
put to us by the Media Lawyers' Association was that one of the consequences is
that the solicitors for the claimant will deliberately prolong proceedings as
much as possible in order that they run up obviously as large a bill as
possible. Have you ever had any evidence
of that or seen that happen?

Sir Rupert Jackson: I have not seen any evidence
which demonstrates to me that claimant solicitors are deliberately prolonging
proceedings in order to inflate costs.
One feature of defamation proceedings is that there is a tendency for pleadings
to become somewhat more complex than in some areas and for technical points to
be taken more often. I am not a libel
specialist, let me say, but my impression is that there are more interim
applications of a technical nature in libel proceedings than elsewhere in civil
litigation, but maybe the Master of the Rolls would care to add to that.

Sir Anthony Clarke: Well, traditionally, that was
certainly the case and libel proceedings generally had a very bad reputation
for giving rise to all kinds of, what I call, the very worst evil we have to
deal with, namely satellite litigation where money is spent on satellite issues
which are not really about resolving the merits of the case, and endless
technical points, historically, were made in defamation-type cases. My impression is, and I am not a libel lawyer
either, although I do sometimes hear appeals in defamation of privacy cases,
but my impression is that, since the advent of the Woolf reforms ten years or
so ago, that evil has significantly improved and it is certainly something
which judges should, and I think probably do, look out for because it is
obviously very, very unsatisfactory for any party of any litigation
deliberately to string it out in order to make money.

Q939 Chairman:
It
was an allegation made directly to us by the Media Lawyers' Association that it
happened on a regular basis. I merely
leave it at that.

Sir Anthony Clarke: Well, I do not know whether
the claimant lawyers accepted that and perhaps they did not.

Q940 Mr
Hall: Could I explore with you the issue of
costs-capping. The rules were changed in
April of this year, yet the judiciary seem to have taken a very cautious
approach to this particular attempt to control the costs that a successful
person in the case can claim against the losing person in the case. Why has there been a cautious approach to
this particular change in the rules?

Sir Anthony Clarke: Well, I think Rupert Jackson
again is the man to ask because he chaired a working group on the Civil
Procedure Rule Committee on this very question.

Sir Rupert Jackson: Well, I am not sure one can
say whether or not a cautious approach has been taken to costs-capping by the
judiciary since the new rules came into force because, as Mr Hall rightly
points out, the new rules only came into force in April and I doubt, well,
there may have been some applications since then, but four weeks is a very
short time. Before April of this year,
there were no rules governing costs-capping.
When costs-capping orders were made by the courts, although there were
no specific rules, they were using the general case management powers given to
the court by Part 3 of the Civil Procedure Rules, and it is quite right that,
over the years, the courts have been very cautious in the exercise of the
costs-capping ability under Part 3. The
reason is that the costs-capping process is extremely expensive. There is an application with supporting
evidence, evidence put in in reply, then there is a hearing, possibly an
adjournment for further material and then possibly another hearing, and then
the assumptions upon which the costs cap has been set may be invalidated
because litigation may take an unexpected course and then there could be an
application to vary the cap. Costs-capping,
which is sometimes seen as a panacea for the problems of excessive costs in
litigation, can generate its own problems; it can give rise to satellite litigation
and yet further costs, and there is a danger that, if costs-capping is
undertaken too freely, it will end up actually increasing the costs of
litigation rather than reducing the costs.
The risks may be particularly high in relation to defamation because, as
Mr Justice Eady pointed out in the Tierney
case, defamation cases, perhaps more than other civil litigation cases, have a
habit of taking unexpected and unforeseen turns. Therefore, the courts have generally adopted
a fairly cautious approach to costs-capping, and one of the issues which I
addressed in my report is whether a more expansive approach, or a different
approach, should be adopted to costs-capping, and you will find this addressed
in chapter 45 of my report. It is one of
the serious issues in this inquiry. Last
year, when the Rule Committee was looking at this matter, the Committee
essentially codified the existing approach of the courts, and the reason that
the Rule Committee adopted that cautious approach was that the present
fundamental review of civil litigation costs was about to get under way and it
was thought inappropriate to make any substantial changes to the costs regime
before the present review had been completed.

Sir Anthony Clarke: If I could just add a postscript
to that, as I am sure you all know, at the end of litigation, if there is a
dispute about the amount of costs, then there may be a detailed
assessment. Now, the cost of a detailed
assessment can itself be very great. If
you then focus on the costs-capping process, that itself involves identifying
what the costs are likely to be and one way of doing that is to conduct
something close to a detailed assessment in advance. Now, if you do that, you are then spending a
lot of money assessing costs which have not yet been incurred in circumstances
where (a) everybody knows that 95% or more of the cases are going to settle, so
there will never be a judgment, and (b) even where there is a judgment, the
vast majority of costs issues are resolved as well, so there will never be a
detailed assessment, but, if you are going to have a costs-capping exercise in
every case, it has to be very carefully monitored. You would have to have, to my mind at least,
a very robust approach so that you did not spend too much money on assessing
the costs in advance because that would be another example of the kind of
satellite litigation which one is trying to avoid, and that is really quite a
serious problem and it is not easy to have a robust system. It is all very well for the judge to say,
"Right, what shall we say - £10,000", it is very difficult and the more robust,
the more you look at the ceiling and hope for inspiration, the more you adopt
that approach, the more likely it is that later one side or the other will say
that the costs cap is inappropriate and then there will be endless arguments
about whether it is appropriate to reopen the costs cap, so it is not easy. It sounds easy, but it is not easy.

Q941 Mr
Hall: Thank you for that, and both of you have
anticipated the next question as to why these costs caps are not more regularly
used. If I have understood what you are
saying, you are basically saying that, on face value, costs-capping is a good
idea, but the mechanism for doing it actually adds costs to the case.

Sir Anthony Clarke: Well, there is a real worry about
that certainly. In the future, though, I
think we are thinking of better ways and maybe, when we have seen Rupert's
report at the end of the process, we will be able to move forward or some
sensible way forward will be found.
Finally, the Rule Committee in fact refused to introduce a specific
costs-capping rule in defamation cases for the reasons we have given, on the
footing that it would be better not to do it just for defamation, but to
consider the whole matter in the round when we have the whole picture.

Sir Rupert Jackson: If I may add one additional
point to this, although costs-capping has the difficulties mentioned by the
Master of the Rolls, I am looking at another approach to this problem, which
will be a form of costs management by reference to budgets on each side of the
case. This is just one of the many
matters I am looking at, and it would entail that the solicitors on each side
provide their budgets to the court with more detail than the rules currently
require and the court manages the case by reference to the budgets on both
sides, if and insofar as those budgets are reasonable. Now, this is one of many matters I am looking
at, it is discussed in chapter 48 of the report and, since that chapter was
written, I have had some intensive meetings developing the proposals in that
chapter. Whether this will be a feasible
way forward or not, I do not know at the moment, but it may be another approach
to achieve what is sought by costs-capping which generates the difficulties
mentioned.

Q942 Mr
Hall: Is it right to say that, in some cases, you
can cap the costs of just one side of the argument, for example, the
claimant? Is that correct?

Sir Rupert Jackson: You could cap the costs of
one side, but it would be more fair, or it is more likely that the judge, in
his discretion, would cap the costs of both sides.

Q943 Mr
Hall: On a slightly different note, where we have
got cases for defamation or privacy that involve media organisations, what is
your view about placing caps on those costs so that we do not have the chilling
effect where we see people refusing to publish stories or they end up in fear
of litigation?

Sir Rupert Jackson: Well, I think that costs caps
in defamation proceedings give rise to the same difficulties as they give rise
to in other forms of litigation. The
danger of costs-capping in defamation proceedings is that you may end up
increasing the costs rather than reducing them.
There are times when costs-capping is appropriate and the Civil
Procedure Rules, as amended last month, provide for costs-capping in
appropriate cases, both for defamation and all other areas of litigation.

Q944 Paul
Farrelly: I want to come on to issues of jurisdiction
and forum-shopping in a moment, but your answer there regarding the examination
of budgets begs the often-asked question of whether claimants should be subject
to means-testing.

Sir Rupert Jackson: I myself see considerable
difficulty in devising a set of rules, the effect of which would be that only
persons who satisfy a particular means test are entitled to instruct their
solicitors and counsel on a conditional fee agreement, and I see very considerable
force in the reasoning of the House of Lords.
Whilst I am conscious of the problems which conditional fee agreements
with recoverable success fees and recoverable ATE premiums generate, I am at
the moment very doubtful that means-testing would be the way to crack the
problem; I think that I have got to look for other solutions.

Q945 Paul
Farrelly: I am sorry if you have addressed that already,
but I missed it. One alternative
approach, which has been suggested by editors of certain newspapers, newspapers
which are not involved in cheque-book journalism, shall we say, is that an
early judgment on the meaning would be very helpful in defraying costs.

Sir Anthony Clarke: Well, the courts have powers
to take individual issues and to decide them separately from the other issues
and, as far as I am aware, it is not uncommon to have a preliminary issue on
the question of meaning, and indeed I myself was involved, I seem to remember,
in an appeal in relation to meaning where the only question was whether the
meaning, which the claimant said the words had, was a meaning which was open to
that, so yes. It is an important feature
of all kinds of litigation, namely to try and identify key issues which can be
decided shortly and comparatively cheaply which will then, hopefully, lead on
to a settlement of the whole dispute, so the answer is yes.

Q946 Paul
Farrelly: Is there anything, in your opinion, that could
be done to facilitate that?

Sir Anthony Clarke: Well, I think the rules
sufficiently facilitate it already. If a
defendant, for example, says that the meaning suggested by the claimant is a meaning
that the words complained of could not have, then there is nothing to stop that
defendant going to the court and asking the court to direct that that issue be
decided as a preliminary question, and these days, I would have thought, judges
would be keen to do that.

Q947 Paul
Farrelly: Is that normally then subject to appeal and
then it potentially runs the risk of costs running away?

Sir Anthony Clarke: Well, there is, of course, a
risk of that, but, if the resolution of that question is going to lead to the
settlement of the whole dispute and, in effect, cut out any further dispute or
costs, then it is desirable.

Q948 Paul
Farrelly: Is it used often enough? Do judges ----

Sir Anthony Clarke: Well, I would have thought
they did. I cannot say that I have in
front of me the statistics in relation to how often that happens in defamation
cases, but it certainly does happen, I know that, and I can see no reason why a
defendant should not apply for such an order; it seems very sensible in all
sorts of cases.

Q949 Paul
Farrelly: I want to move on to jurisdiction. The issue of jurisdiction now has become very
noteworthy in some cases, but it is also more relevant because of the march of
the Internet. Is it time that our libel
laws moved with the times and that we institute the single publication rule, as
they have in the United
States?

Sir Anthony Clarke: Well, I do not really think
that is something for me to comment upon; that is a matter of principal policy,
if you like, and it is a matter for Parliament, but it does not seem to me
that, as a judge, it is appropriate for me to comment upon. I might have a personal opinion as to what
the answer to that should be, but, wearing my present hat, it seems that it is
a matter for you, if I may say so, rather than me.

Q950 Paul
Farrelly: But we take advice from eminent and
experienced people like yourselves on these questions.

Sir Anthony Clarke: I can quite see that there
are arguments in favour of it which have been put very forcefully to you, and
then there are arguments on the other side which have been developed in some of
the cases. After all, you do not have to
leave your material on the Internet and, as some judges have said in the past,
"Well, if you do that, you've only got yourself to blame because you could
remove it or qualify it and, if you choose not to, it may be that you do it
because you like", as one judge said, "the ubiquity of the Internet", so there
are two sides to the question and I think that a quite significant case could
be made for either view.

Q951 Paul
Farrelly: That is clearly one issue as to whether
someone does not have the commonsense to take something down, once notified,
but, if it has been there for ten or 15 years, it is still actionable, so, in
those sorts of instances, as a judge, which of the arguments, for or against
single publication, do you find most persuasive?

Sir Anthony Clarke: Well, I do not think I am
going to answer that!

Q952 Paul
Farrelly: I can see that I am not going to get any
further with this! Clearly, it is a
matter of great concern to the likes of The
Wall Street Journal, Private Eye
and some of our major newspapers, but how often do issues of jurisdiction arise
in libel cases, in your experience?

Sir Anthony Clarke: Certainly from time to time,
but certainly no more than in many other areas.
I spent my whole career really, before I went on to the Bench, dealing
with commercial litigation where a good proportion of my practice was arguing
about whether or not the particular dispute should be heard in England or in
Timbuktu or wherever, so I certainly do not think it is, in the great scheme of
things, particularly significant, although I can see that it does cause
concern, but the principles are reasonably clear, I think, at present. To my mind, I would have thought they worked
perfectly well, but I can see that there is a concern about forum-shopping.

Q953 Paul
Farrelly: It comes back to the question that it would be
useful to have some data to get this whole issue in perspective. Is there any data at all which we can draw
on?

Sir Anthony Clarke: I do not know. It is possible that HMCS, the Court Service,
might have data about that. I quite
agree, it would be helpful to have data.
I personally do not have it, but it may be that the Court Service would.

Q954 Paul
Farrelly: Perhaps we can follow that up and, likewise,
data such as how many claims for, if you will excuse my Latin, forum non conveniens there have been and
how many have been successful, that is data which would be useful.

Sir Anthony Clarke: That is really the same
point. I would have thought that the
people to go to, as it were, would be the Court Service on that.

Q955 Paul
Farrelly: We have met with legislators in the United
States who have been bringing, or attempting to bring, in the laws both in New
York and federally, and one of the concerns is whether the UK courts have
become an object of ridicule for admitting the sorts of claims that we have
seen where Ukrainians are sued because the left side happens to be accessible
here. Is there any threshold at all that
you can give us some guidance on as to how the courts approach it or whether
our courts are the appropriate jurisdiction?

Sir Anthony Clarke: Well, the general principle,
I think, is this: that, if you have a case where you can find the defendant
within the jurisdiction so that you can serve the proceedings on the defendant
as of rights within the jurisdiction, then, on the face of it, you are entitled
to proceed with your action, unless the defendant persuades the court that the
action should be stayed on the grounds of, what I think is usually called, 'forum non conveniens' where you have to
persuade the court that the interests of justice make it more just that the
case be tried somewhere else, and, as I say, I have spent many happy hours over
the years arguing about just that on one side or the other. The case is a bit different where you cannot
find the defendant within the jurisdiction because then you need the permission
of the court to serve the proceedings on the defendant outside the
jurisdiction, and then the onus of proof is on the claimant to satisfy the
English court that the English court is the appropriate place to make the
action. Of course, it could only do it,
in any event, if the tort, in this case the libel, was committed within the
jurisdiction, so there would have to be publication within the jurisdiction so
that it could be said that the tort was committed within the jurisdiction. I think the approach, or my impression,
though I cannot say I am an expert in this, is that, if there has been a
significant publication within the jurisdiction, then, in the first class of
case anyway, the courts have ordinarily taken the view that, if they have found
the defendant here, he ought to be entitled to claim about an unlawful
publication here, but, if it is a very insignificant part of a worldwide
publication, then the courts will say, "No, this case ought to be tried
elsewhere". The only thing is, of course,
that the law may be different here, so, for example, the law of the burden of
proof may be different in relation to justification. The burden is on the defendant, I think, to
justify an alleged libel here, whereas the burden may be the other side in some
other way in some other jurisdictions, and I am not talking about the European
Union where of course there are strict rules about jurisdiction.

Q956 Paul
Farrelly: Well, that is the nub of the issue, and the
two words, "significant" and "insignificant" are also the nub.

Sir Anthony Clarke: Well, these are questions of
judgment really and they depend upon the facts of a particular case, which is
what judges are for.

Q957 Paul
Farrelly: If I just take one particular case, the case
which ultimately came before Mr Justice Eady, or two cases, John Alexis Mardas v The New York Times
and the same claim against The
International Herald Tribune, the High Court struck those claims out on 10
June last year. The claimant had
permission to appeal in August and then Mr Justice Eady upheld that appeal in
December 2008 which led, in January this year, to a large Private Eye article, entitled, "English law is 'Carter-Rucked'". I do not know whether you are familiar with
Mr Justice Eady's judgment in that case.

Sir Anthony Clarke: I have read it, but I do not
think it would be at all appropriate for me to comment upon the facts of a
particular case. After all, there might
be an appeal and it might come to us judicially.

Q958 Paul
Farrelly: It would appear though from this case, from Mr
Justice Eady's comments, that there cannot be any threshold, given the law as
it stands. He says, "This cannot depend
on a numbers game".

Sir Anthony Clarke: Well, obviously, one would
have to look in detail at his reasoning to see if it was sound, but the losing
party could, presumably, attempt to appeal, if they were disappointed.

Q959 Paul
Farrelly: Would statutory guidance, and in what form, be
helpful?

Sir Anthony Clarke: It would have to be extremely
carefully thought out, the statutory guidance.
I think one would have to look at the guidance to decide whether it was
helpful or not.

Q960 Paul
Farrelly: The American publishers have put a collective
submission in to us where they suggest certain thresholds. I do not know whether you have had a chance
to see that submission.

Sir Anthony Clarke: I am afraid, I have not, no.

Q961 Paul
Farrelly: If you do get the opportunity to look at it,
it is the final paragraph, 18, where they suggest, what seem to be, some
sensible thresholds, and it would be very interesting to have some evidence as
to whether there might be unforeseen consequences or, indeed, whether those
thresholds were sensible, if you could address that without reference to any
particular case that has been going on.

Sir Anthony Clarke: I will certainly look at them
and see if it is appropriate to make any comments and, if it is, I will.

Q962 Paul
Farrelly: Finally, the American publishers, you may
think, scurrilously or not, make the following observation about the English
libel industry: that it is unusual, its costs, by far, are the highest in Europe and there are only two main libel chambers in
which the practitioners and judges are drawn.
That begs the whole question of whether to have specialist judges or not
and what is better, but they imply that it is pretty much a racket on a very
closed circuit.

Sir Anthony Clarke: Well, I certainly would not
accept that. I have not seen the
evidence. I can see that they may have
an axe to grind, the writers of that piece, but there are many specialist areas
of the law where there are only limited numbers of chambers because, if you are
operating in a specialist area, obviously, what the market wants is specialist
advocates and, just as they want specialist solicitors, they want specialist
barristers and there are, inevitably, likely to be a small number of
chambers. Equally, it has been found
over the years to be desirable to have specialist judges and it is not all that
satisfactory to have judges who do not know anything about the area that you
are in. I myself spent many years doing
maritime work and there are specialist judges and, to my mind, if you had to
choose between specialist judges and generalists who know nothing about it, I
would go for the former.

Q963 Rosemary
McKenna: In 2005, the judiciary set up a panel of
media-trained judges to try and improve the media understanding and public
understanding of the judiciary and judgments.
How would you assess the success of the media panel?

Sir Anthony Clarke: I think, first of all, it is
important to appreciate what the media panel does and what it does not do. It is not really a panel, as such, but it is
a number of judges who have been trained to, if you like, cope with the media
since it is not always terribly easy without any training, as perhaps we all
know. However, what the judges cannot
really do is comment upon the facts of particular cases, and I think that has
been accepted widely by the media.
Obviously, we have the Judicial Communications Office now so that, if
there is a piece in the newspaper which is simply hopelessly inaccurate, which
does sometimes happen, as we all know, then the Judicial Communications Office
is able to correct matters like that, but the media panel activity has been to
discuss more general problems, and I have a list of the sorts of topics which
have been discussed in recent times, for example, problems relating to
litigants in person because we have, perhaps in these days when there is less
and less public money to assist litigants, more and more litigants in person and
they do, undoubtedly, provide their problems, and how to cope with them is an
important factor. Then there have been
panels about witness intermediary schemes and witness protection schemes, there
have been discussions on bail, then why juries are dismissed, and there has
even been one on the day in the life of a judge, though I do not know who would
be interested in that, but there we are!
Then, there have been panels on, for example, the role of summing-up
proceedings, how the county courts deal with repossessions more recently, the
process of small claims and, more recently, transparency in the family courts,
which has been a big issue, so those sorts of topics.

Q964 Rosemary
McKenna: I noticed, from the list that you have
supplied to us, that most of it would seem to be not the print media, but
television and radio, certainly in 2008 and 2009. Is there an attempt to improve the reporting
of cases in the print media or the judgments in the print media of the
judiciary, for example, the judgment that Mr Justice Eady was 'creating' a
privacy law by the back door, which was widely reported?

Sir Anthony Clarke: Well, one thing we have tried
to do, again through the Judicial Communications Office, is we have tried to
make courts' judgments more readily available and more immediately available to
the media so that the media have the actual judgments delivered because many of
these judgments are handed down in a written form and sometimes we have
summaries, and we are having summaries more often now, and even press notices
to make sure that the information which the media actually have in their hands
is accurate because I think many of us over the years have had quite a bit of
experience of inaccurate reporting of cases we have been involved in one way or
another. It is obviously desirable and
it is quite important for us to make sure that our judgments are accurately
reported, and all the business about whether Mr Justice Eady created a privacy
law all by himself would not perhaps have had the publicity it had if people
had actually read a lot of these judgments because it is simply not the case.

Q965 Alan
Keen: We have obviously had extensive submissions,
but the joy of having you actually with us today is that I wonder if you could
talk us through the tension between Article 8 and Article 10 because that would
be very helpful.

Sir Anthony Clarke: Well, the reason, for
example, I said just a moment ago that Mr Justice Eady did not invent the
privacy law was that there had been much debate over many years about whether
the common law should develop a privacy law, and the common law never did,
although it did gradually develop the law of confidence into something pretty
close to a privacy law, and we could argue about whether it really is a privacy
law or whether it is like a privacy law, but not really a privacy law, and the
like. It was gradually developing, but
the whole area was radically altered with the advent of the Human Rights Act
which, of course, incorporated the European Convention on Human Rights into our
law. Before that, although we were
signatories, and had been from the beginning, to the Convention, the United
Kingdom that is, so, therefore, it had signed up to Article 8 on the one hand
and Article 10 on the other, it was not until the Human Rights Act was passed
that it became actually part of our law.
From that moment onwards, it was the court's duty, and the role of the
judge, to balance the rights in Article 8, respect for privacy, and the rights
in Article 10, freedom of expression. As
we know, in each of those articles it has, in paragraph 2, a sort of balancing
provision, so, for example, in Article 10, freedom of expression, but having
regard to the rights of others and the like, and one of those rights is the
right to privacy, and there has been a lot of jurisprudence now about how to
balance the two rights. For example, it
has been authoritatively held, I think, by the House of Lords that one does not
trump the other, they have got to be balanced, and it is really a matter for
the judge in the particular case to carry out the balance. I think, for that simple reason, that it is
quite wrong to say that any particular judge has invented the privacy law
because actually it derives from the Convention which was enacted by Parliament
in the Human Rights Act. Of course, if
Parliament wanted to change the law, it could, presumably, in theory at least,
do so, though of course the United
Kingdom remains a party to the Convention
and it would be a very large step perhaps for the United Kingdom to withdraw from the
Convention, if indeed it were possible.
The way it has actually worked is that there have now been quite a large
number of cases, some have been before Mr Justice Eady and many before other
judges, quite a lot of the cases have gone to the Court of Appeal and quite a
lot of the cases have then gone to the House of Lords, and, of course,
Strasbourg has had its twopennyworth as well, and Princess Caroline, in the Von Hannover case, played a very big
part in the development of the Article 8 aspect of it, but it recognises that
there is this balance to be struck and the balance has to be struck on the
facts of each particular case. There is
really nobody else who can do the balance, but the judge in a particular case,
and he or she has to apply the principles which have been adopted and laid
down, first of all, by the Court of Appeal and then by the House of Lords where
all of us have to have regard to the Strasbourg jurisprudence under section 3,
I think it is, of the Human Rights Act, so that is how it has developed on a
case-by-case basis.

Q966 Alan
Keen: Do you have anything to add, Sir Rupert?

Sir Rupert Jackson: Nothing. I agree with all the Master of the Rolls has
said.

Q967 Chairman:
You
are saying that obviously it has to reflect the will of Parliament, and one
thing Parliament did do was insert Article 12 of the Human Rights Act, which
was widely interpreted as saying to the courts that there should be greater
weight to freedom of expression against privacy, yet it appears that the courts
are doing precisely the reverse.

Sir Anthony Clarke: This is section 12 of the
Human Rights Act. Is that not about
interlocutory injunctions? Would you
just tell me what it says?

Q968 Chairman:
It
says: "The court must have particular regard to the importance of the
Convention right to freedom of expression ..."
Essentially, as I understand it, it is Parliament's intention that, in
striking this balance, freedom of expression would be given greater weight.

Sir Anthony Clarke: Section 12 is about the grant
of interlocutory injunction, is it not?
"(1) This section applies if a court is considering whether to
grant any relief which, if granted, might affect the exercise of the Convention
right to freedom of expression." This
section is about the case where an application is made to the court for an
injunction to restrain publication by a newspaper. Then: "(2) If the person against whom the
application for relief is made ('the respondent') is neither present nor
represented ..." That is a further provision in relation to the protection of the
press. Then the point you mentioned:
"No such relief is to be granted so as to restrain publication before trial
unless the court is satisfied that the applicant is likely to establish that
publication should not be allowed." That
is a much tougher test for an injunction than it is in relation to every
other injunction in every other walk of life.
In every other walk of life, all you have to do is to set out your case;
you have to say that there is a serious question for the court to try - which
is quite a low test. As long as you have
some kind of realistic case, a case which is not fanciful, then you satisfy the
merits test in the ordinary everyday case; for example, if you want to stop
your neighbour doing something. Here, the
test you have to establish is that the claimant is "likely to establish that
publication should not be allowed". In
fact, the House of Lords in a case called Cream has considered what that
means. I would recommend anybody who is
interested in section 12 to read the House of Lords decision and reasoning in
the case of Cream because it does set out in very considerable detail
the approach which the House of Lords decided the courts should adopt. If you are thinking about this, I would
recommend that you do look carefully at the reasoning in Cream because
any new law would have to grapple with that.
It is a somewhat nuanced approach but, essentially, the provision is as
stated in this statute; namely, that you have to show that it is likely (in the
sense of "more likely than not") that you will win at the trial. That is quite a tough test. As compared with other areas of our life, it
does give the defendant - the media, if you like - quite a bit of
protection. It always has, historically,
been very difficult, if not impossible, to obtain an injunction, for example,
to restrain the publication of something which is said to be defamatory. If the defendant has indicated that they may
wish to justify the allegation, then the general rule is that no injunction
will be granted, because it is recognised that freedom of expression is a very
important right - as you say, recognised by article 10. I suggest to you that section 12 is not about
the balance between article 8 and article 10.
There, when you ultimately come to look at it, it is a balance where you
have to take account of both. I see in a
case decided only yesterday or the day before in this area that Strasbourg stressed the
importance of article 10.

Q969 Chairman:
I am
conscious that the Lord Chancellor is waiting.
I do not want to delay him for too long.

Sir Anthony Clarke: We certainly would not want
to keep the Lord Chancellor waiting.

Q970 Chairman:
One
of the points made to us by the media is that judges who have
an application for an injunction which they receive on a Saturday evening
are more likely to grant it on the basis that there is plenty of time: "We can
come back to it, perhaps next week, and look again," whereas not granting it
cannot be reversed. The media,
therefore, think that they are biased in terms of granting injunctions in
favour of them being given. You are
saying that section 12 should operate in precisely the other way.

Sir Anthony Clarke: Section 12 should operate to
give judges great cause for concern before granting it, even late at night on a
Saturday night. It is quite true that,
across the board, generally, for those of us who have been on duty late at
night on a Saturday night when you have been given some terrible story, in most
cases the sensible thing to do is to grant the injunction, to hold the ring
until Monday, because, mostly, the balance of convenience or the balance of
justice is to say, "Let's decide that now, and then the thing can be thought
out and decided on a Monday." This
shows that the courts are very reluctant to do that, because sub-section (3)
applies in the case you mentioned, and in subsection (2), when an application
is made ex parte (as it used to be called) ".... no such relief shall be
granted unless the court is satisfied (a) that the applicant has taken all
practicable steps to notify the respondent; or (b) that there are
compelling reasons why the respondent should not be notified." You need a very, very good reason indeed
before you can persuade a judge who is applying the thing properly to grant you
an injunction in the circumstances you mention.

Q971 Paul
Farrelly: We have jumped from media panel to the balance
between privacy and freedom of information, and that was the subject covered in
Paul Dacre's speech.

Sir Anthony Clarke: Yes.

Q972 Paul
Farrelly: Which was an attack on Mr Justice Eady, and
your submission is a very cogently argued defence of the judgments that he has
made. Mr Justice Eady himself made
a speech in the House of Lords two or three months ago.

Sir Anthony Clarke: In the House of Lords?

Q973 Paul
Farrelly: It was the Intellectual Property Lawyers'
Association. It was under Chatham House
Rules, but the Sunday Times got wind of this. The reporter Stephen Robinson asked Mr
Justice Eady for a copy of his speech, and Mr Justice Eady gave him a copy
of his speech, and he quoted a little bit from it in a Sunday Times magazine
article. We have not had Mr Justice Eady
here. I think we have asked his chambers
for the speech but I do not know what the response is. I wonder whether you might prevail in your
usual way so that we can have a copy of his comments.

Sir Anthony Clarke: It is really a matter for Mr
Justice Eady whether he wishes to comment.
Indeed, it is a matter for him whether it would be appropriate for him
to do so. I will certainly inform him of
what you have said.

Q974 Paul
Farrelly: It has been given to a journalist.

Sir Anthony Clarke: If he has already given it to
somebody else, it may be that he would be quite willing to make it available to
the Committee. We will undertake to ask
him.

Paul Farrelly: Thank you.

Chairman: Could I thank the two of you
very much indeed.

Witness: Rt Hon Jack Straw MP, Secretary
of State for Justice and Lord Chancellor, gave evidence.

Chairman: Good
morning. For the second part of this
morning's session, I would like to welcome the Lord Chancellor and Secretary of
State for Justice, Jack Straw. I will
invite Philip Davies to begin.

Q975 Philip
Davies: Perhaps we could start where we left off with
our eminent judges, with the Human Rights Act.
Could you give us your thoughts on the balance between articles 8 and 10? If not a contradiction, there certainly seems
to be a great tension between the two.

Mr Straw: Essentially it is as the
Master of the Rolls has described - and he is much more of an expert on
how these articles, alongside English common law, have been interpreted over
the years. As he was describing, the Convention (and therefore the Act)
requires that there is a balance here to be struck between freedom of expression
and a right to privacy under articles 8 and 10 respectively. That is a very wide discretion given to the
courts. The interesting thing about the
Human Rights Act which I think it is always worth bearing in mind is that,
although it was not incorporated into British law until the year 2000, 49 years
after the Convention came into force, the rights that are written down in the
key Convention articles are essentially British rights. This was drafted by British jurists, not
least Sir David Maxwell Fyfe (as he then was), who later became Lord Kilmuir,
the Lord Chancellor in the 1950s, and they were trying to set in a code what
was understood to be the basic civil and human rights which we had taken for
granted in the United Kingdom for many centuries - for sure here we have taken
for granted, and the courts have then given some articulation to the idea both
of a right to privacy and to freedom of expression. Then, as the Master of the Rolls has
described - and he has set out quite a number of the leading cases on this,
including the Naomi Campbell case - there was already developing
jurisprudence in respect of the law of confidence, which, crab-like, as the
Master of the Rolls was indicating, was developing something along the lines of
a law of privacy, and then we got the Human Rights Act, which certainly moved
it up a gear. If your next question is,
"Do you think there should be statutory changes made?" the answer is that I
want to wait to see what your Committee has to say on it. I am not, Chairman, trying to dodge this, but
I was thinking about this overnight, and there are some areas where, for sure,
it is sensible for Parliament to intervene rather quickly. If you take, for example, the area of the law
of negligence, although there are occasional interventions, not least over
procedural issues (limitation periods and things like that), the law has
developed in a flexible and sensitive way because it has been developed on some
very clear principles which have then been interpreted in particular cases. That is my starting point, but obviously I
want to see what your report says.

Q976 Philip
Davies: Surely the starting point here - which is what
I am trying to get to - is this: when you introduced the Human Rights Act into
British law, in terms of the judgments that have been made, have they panned
out as the Government intended or have there been some unintended consequences?

Mr Straw: I am not being forensic about
this, but my judgment is, in general, if we went back to what we said and what
Parliament said in the 1990s, the interpretation of it has worked out as was
thought, and in some areas, it has worked out in a different way. It is impossible in any circumstances to take
account of an environment which is going to occur in the future. One of the things which I certainly did not
anticipate - which has not affected this area but it has certainly affected the
overall environment of the Human Rights Act and its application - has been the
fact that 11 months after the Human Rights Act came into force, which was on
2 October 2000, we had 9/11. That
meant that we then ended up by fighting two wars and having to introduce a raft
of counter-terrorist legislation which tested those articles in a way in which
it would have been better, if it had been possible, for them not to have been
tested until they had bedded down. That
is one example. Perhaps I might add
this: it is certainly the case - and I know that Mr Dacre, when he came
before your Committee, Chairman, was indicating this - that the newspaper
editors and the journalist organisations were concerned about how article 8
would be interpreted. They were
particularly concerned about interlocutory injunctions, stopping the
presses. That is why I negotiated the
terms of what became section 12 with them.
Although, for sure, they have complaints about the level of fees and
costs - which I fully understand and in many respects share - and they have
concerns about particular decisions in the courts, not least in the Mosley
case, section 12, as the Master of the Rolls has spelt out, has worked to their
advantage without any question.

Q977 Philip
Davies: I think you said in your first answer that the
Human Rights Act has given a wide scope to judges. Surely over the last couple of weeks we have
seen the importance of having a free press and media to expose wrongdoing in
authority. Would you not agree that the
time has come for Parliament itself to clarify the importance that it places on
freedom of speech? I personally would
like to see a greater strengthening of the right of the press to be freer in
what it publishes, but whatever side of the argument one takes on that, surely
it is time for Parliament to decide which should have priority, freedom of
speech or privacy, and set it out clearly, rather than leaving it to judges to
interpret the law. Would that not be
more sensible?

Mr Straw: I do not rule out the idea of
legislation on this; I just say that it is very complicated. My experience of decisions in respect of
human rights over the years is that some of those which caused the greatest
initial excitement have ended in a situation where, because of changed
circumstances or appeals to the Court of Appeal or the Law Lords, things have
calmed down, because those senior courts have produced a better balance. Since I am a respondent to a large
number of cases any day in the courts on human rights bases and others, I can
think of a number of cases in my area.
So I do not rule it out, but where you are seeking to balance privacy
and the right of expression, in the end, if those rights are justiceable, you
are going to have to give that balance to a court. After all, yes, we have seen in the last two
weeks the value of a free and independent press. I do not think there is anybody in this place
who has challenged that, or very few - I mean, there was an argument
beforehand, but that has not been challenged - so quite how a law would have
helped there I am not sure. In
every jurisdiction I can think of which seeks to provide justice, you have, by
one means or another, a right of privacy and a freedom to express yourself as
you wish, and a recognition too that those are potentially, sometimes, in
practice in conflict and therefore it means resolving those conflicts.

Q978 Philip
Davies: I am somewhat encouraged that you are
considering some kind of legislation to clarify the position one way or the
other - you certainly have not ruled it out - but we have had so much case law
now that it is becoming increasingly clear where we are. What would have to
happen for you to decide either, yes, we definitely will or, no, we definitely
will not, that we do not already know?

Mr Straw: Since this is a public
session and there are members of the media here, I do not want to over-egg what
I am saying through your interpretation, but there is a difference in the scale
of things between not ruling something out and considering it. On the scale of things: I am not ruling
it out. There are some things I would
rule out. I do not rule this out. You and your Committee, Chairman, are devoting
a lot of time to this issue, and I want to see what you have to say. That is not passing the parcel: I think that
is a sensible way to do this. If you are
going to go for change in this area of law, you have to do your very best to
make sure it is pretty consensual - not absolutely agreed, but it would be
ludicrous to have it so that it becomes an issue of a partisan battle. I would just say in my own defence, as it
were, that I recognised in 1998 when we were putting the Human Rights Act
together and early 1999 that there were not just concerns in the media but that
they needed to be dealt with. There were
also issues of the churches and religious organisations. We sought to deal with them. But I am not in favour of altering the
articles. That, as the Master of the
Rolls said, would involve a huge change in approach by the three parties to do
that, but I have never ruled out the equivalence of sections 12 and 13 in the
Human Rights Act, which are to do with procedure and alerting the court as to how
they should tip the balance and where they should shine the spotlight.

Q979 Chairman:
There
is no doubt that section 12 was the one area where Parliament attempted to give
guidance to the courts. We have just
heard from the Master of the Rolls that, indeed, if section 12 is applied when
an application for an injunction is made, the judge should give greater weight
to the importance of freedom of expression.
The Master of the Rolls also conceded that on a Saturday night when the News
of the World comes along and says, "Here's our splash story," and the
subject of it says, "I want an injunction," the chances are that the judge may
well say, "Well, we can think about this over a few days and I will give a
temporary injunction to allow us to have greater consideration," which of
course is the last thing the News of the World wants, and therefore the case of the media is
that section 12 is not really having the effect intended and that judges do
tend to grant injunctions.

Mr Straw: As far as that is concerned, Chairman,
I would like to see the evidence. I do
not have data. Looking at summaries of
the evidence you have already taken, one of the questions raised was data on
the number of applications made for interim injunctions out of normal hours,
or, indeed, in hours as well, and the numbers granted I would like to see what the data is on that
and, also, before and after the coming into force of the Human Rights Act. I guess that I am probably the only
person in this room who has had experience of not only seeking an injunction on
a newspaper but being successful in getting it on a Saturday night, and that
was in respect of the leak of the Lawrence
inquiry report to the Sunday Telegraph in mid February 1999. The argument there was about a breach of
copyright, rather than a breach of privacy.
In the end the court did grant the injunction on the grounds that there
was no public interest in publishing this document on a Saturday when it was
going to be published anyway the following Wednesday, but they were not patsy
about this at all - I mean, they were pretty thorough. Section 12 says in its first subsection:
"(1) This section applies if a court is considering whether to grant any
relief which, if granted, might affect the exercise of the Convention right to
freedom of expression." Although, as the
Master of the Rolls correctly said, it specifically, as in subsections (2) and
(3), relates to interim injunctions, subsection (1) makes it clear that it is
drawn more widely and has general application.

Q980 Chairman:
On
the issue, however, of injunctions, you may have seen from summaries of the
evidence we have received that one of the main issues that has been raised with
us, particularly by Max Mosley and, indeed, by Schillings, Solicitors, was
their argument that there should be a right of prior notification, that if a
newspaper is going to put you on their front page tomorrow morning, you should
be told that is going to happen. The
media have argued in response that the reason they are opposed to that is because
if I was told that I was about to be exposed in the newspaper, I would
immediately go and seek an injunction.
Your argument would be that the hurdle to acquire an injunction is set
quite high under section 12, and therefore that should not necessarily be an
argument against pre-notification.

Mr Straw: Yes. I also saw that Mr Dacre said: "99 times out
of 100 we inform the person about what we are going to say and ask for
comments." As one of those people whose
circumstances have been given a slightly wider audience recently by the Daily
Telegraph, they certainly afforded me that courtesy. Again, I will look to see what your Committee
has to say on this. I can see there is
an argument which goes: "The bar is set high for an interim injunction, therefore
what is there to lose if the media are required in any circumstances to inform
an individual of anything which is potentially going to breach their
rights to privacy or, I assume, be defamatory?" but I have to say, on the scale
which I gave to Mr Davies, that I am very sceptical about going down that
route. The reason why newspapers go to
individuals to ask whether things are true or not is, first, because, funnily
enough, they have an interest in telling the truth; they do not want to develop
a reputation for telling lies. For
example, in the case of the Daily Telegraph in my own circumstances, it
was a good idea from their point of view that they did come to me, because one
of the suggestions they put to me was fundamentally untrue - which was where
our second home was. It was sensible for
them to do that. They apologised for
that error, it was not published, and that was the end of it. So they have an interest, and they also know
that if in subsequent proceedings it turns out that, frankly, they have been
pretty casual about checking their facts, that is likely to go to the issue of
damages and certainly not find favour in the courts. There could be cases, however, where they are
doing this with some villainous behaviour, seriously villainous behaviour,
where they are, for example, trying to protect a vulnerable witness. In those circumstances it is right for the
media to be at risk on this, but if they, having looked at all this, having had
good legal advice, having satisfied themselves that what they are doing is in
the public interest and that there is this genuine risk of whoever they are
going against using their money or, worse, using other power, then I think they
should be entitled to publish and I think this should be their judgment.

Q981 Chairman:
Say
they were investigating a serious criminal, where there might be a risk to a
witness if they were to tip him off, then surely any subsequent action for
failure to pre-notify would fail in the courts if the newspaper was able to
demonstrate that there was a good reason why they did not give
pre-notification.

Mr Straw: Indeed. That is true.
For all of us - and it is usually Sunday newspapers - who have had the
call on a Saturday afternoon to find out this, that and the other - and I have
been in public life now for 40 years, so over the years, from time to time, you
get these calls, which may be about political issues or may be about personal
family issues, as they were in my case some years ago, and then obviously now
on the expenses stuff - funnily enough, it seems to me, whatever else one
thinks about the press, there is more of a requirement on them to observe
standards of truth. They have the same
interest, in many ways, as the person about whom they are reporting, to ensure
accuracy. Why on earth would they want
to put material in which is obviously inaccurate? It is also the case that sometimes they leave
it a bit late, but they do inform the person about whom they are going to write
with sufficient time normally - just - for countervailing action to be taken if
necessary. Chairman, my sense is that
this current practice by the press is not broke, and I think the prescription
could be worse than the problem.

Chairman: You
will appreciate that this was raised by Max Mosley, who did have his private
life exposed to the entire world, who did then go to court and who did
win. He obtained a judgment that the
articles should not have appeared, but of course it was too late by then: his
privacy has been removed. His case to us
was that he is not unique; that this is a practice that newspapers quite
regularly do; and that a prior notification would offer some defence to people
who should have the right to have their privacy protected.

Q982 Rosemary
McKenna: Perhaps I could add to that. We have heard evidence from private
individuals who say that stories with a grain of truth have almost destroyed
their private lives and their families' private lives, and that there was no
prior notification.

Mr Straw: I do not want to go into
details that were public ten years ago, but having experienced this kind of
story, families are put under huge pressure in these circumstances. We were told about the story in advance. It is the publication of the story that is
the problem. I have no reason whatsoever
to disbelieve what Mr Dacre was saying to this Committee, that 99 times out of
100 the media are going to tell the party.
Let me jus saying the case of Mr Max Mosley, it may be that if they
had told him at five o'clock
he would have gone out and got an injunction.
He might have done. It is
possible, because he has the power and the money to do so. Most people do not have that. There is a need to secure a better balance
here, if that is what the mischief is that the Committee identifies. My first port of call here would be the Press
Complaints Commission Code, with the understanding, which I think is the case -
and I am not a defamation lawyer, Mr Farrelly - that if that was breached in
a particular case, then that breach of the code, amongst other things,
would be capable of being brought to the attention of the judge in defamation
or privacy proceedings.

Q983 Paul
Farrelly: I hope I am not leaping out of the train of
discussion, Chairman, but in relation to prior notification, when we were
taking evidence earlier on I gave the example of the case of Robert Maxwell.
There are stories where time is an element, particularly in financial
investigations, particularly if people are fund raising, where prior
notification as a mandatory rule would be very difficult and would stop a
lot of serious journalism. In my
experience there are two circumstances where there would not be prior
notification: the case where you have the subject bang to rights whether it is
an intrusion of privacy or not, such as the Max Mosley with the video, or where
the newspaper does not care whether they have the facts right because they make
a judgment that the person cannot afford to sue. Otherwise, generally, I think newspapers are
careful to check their facts. For the Daily
Telegraph, I am sure they will have checked what came out on this occasion
but I am sure they would have a very strong public interest defence and
any action against them would be undermined via government or any of its
agencies - like the German Government have paid somebody from an America bank
for stolen data on tax evaders, so I am sure those issues are being
weighed. Legal change does not happen in
a vacuum. Constitutions do not happen in
a vacuum. The reality is that in this
country we have a press of a dual nature.
We have, in the vernacular, the "tabloid press" and then the more
serious press for which privacy is not generally an issue; they do not go in
for intrusion of privacy. Have you
considered, in the circumstances in which we live in this country, whether
there is potentially a trade-off between statutorily strengthening privacy so
that it is not just judge-made case law, on the one hand, but, on the other
hand, a greater protection, a stronger statutory defence for serious
investigative journalism in the public interest? Have you considered whether there might be a
trade-off here?

Mr Straw: I am open to ideas here, Mr
Farrelly. Say you do what you have
suggested and you strengthen people's privacy - and I will come back to why I
acknowledge that a case is made for that - and you strengthen the right for
serious investigative journalism - so you have hardened up the rights on both
sides - you are still going to end up with somebody having to make a judgment
about the conflict. If you take investigative
journalism, the thing that has been put to me as something that has a chilling
effect on investigative journalism is not the court's interpretation of article
8 versus article 10 but conditional fee arrangements for defamation cases. It is for that reason that I believed and do
believe that there was a necessity actively to look at amending the law on CFAs
and defamation cases in advance of the very thorough review that Lord Justice
Jackson is undertaking. That is why I
published the consultative document earlier this year, where the consultation
is closed. If I am presented with
evidence that there is a particular problem - as unquestionably there is
here: I think the argument is overwhelming, a particular problem which needs
dealing with, you go ahead and deal with it.
That is how I deal with that approach.
If you ask me as an individual what I think about the tabloid
revelations which intrude into people's private lives, I say that I am
ambiguous about this. I buy - not out of
expenses! - tabloids on a Sunday. I am
sorry to say, if apologies are needed, that I am sometimes entertained by
them. On the other hand, I also
sometimes think, "What would it be like to have, say, details of your total
private life exposed?" None of us would
want to see our public lives gratuitously spilled over the papers - although
the papers are getting slightly better about this matter then they were. That is an area where I do feel very
sorry for people, and if they are people of humble means, it is not going to be
open to them to take any kind of proceedings in normal circumstances. I think that is about trying to get the press
better to set a standard there for themselves.
I think it is fairly hard to legislate for that.

Q984 Chairman:
We
are going to move on to the CFAs, but before we do, on the issue Paul raised
there is case law which is now often cited (originally the Reynolds
defence, and then came Jameel)
and that is held up as being available to newspapers who have undertaken
responsible journalism and through not their own fault might have made a
mistake, and yet the evidence we have received is that it is virtually never
used for a variety of reasons. Do you
think there might be a case for putting it in statute?

Mr Straw: We would certainly look at
that. That was the basis of the 1952
Defamation Act - at least that is my recollection - to encapsulate certain
defences into statute law. Yes, if there
is a case, one would look at it. In the
conversations I have had with media organisations, they have not said to me -
and it does not mean they do not believe this, but they have not said it to me,
as I recall - that there is a problem with the Reynolds defence. They keep saying to me, especially amongst
the regional newspapers or some of the less well-financed national newspapers,
that they have a problem about being at risk on costs in respect of CFAs or in
respect of, say, contemporary Maxwells, and that is, I think, a real
problem.

Q985 Chairman:
Is
that something you are considering?

Mr Straw: I am not considering it at
the moment.

Q986 Paul
Farrelly: It is the case that the traditional concerns
of newspapers regarding libel and its restrictive nature in this country have
given way to the concerns. It is the
operation of CFAs, but there is a double effect. What the Chairman is trying to get to is
whether, given the evidence that we have received that the responsible
journalism defence is not really working in practice and it becomes a trial of
the journalist and the journalism, any consideration might be given to putting
that on a better standing.

Mr Straw: On that one, I would
certainly be very happy to look at it.

Q987 Chairman:
It
would require you probably to put into a statute a definition of public
interest. Is that possible?

Mr Straw: Is it possible? It is possible. We have thought about it in respect of the
Freedom of Information Act. Ultimately,
if you have a public interest test, you can say that these matters need to be
taken into account - certainly, in a discrete area like investigative
journalism - but, however detailed you are, you will come to a point of how you
apply those general principles to a particular set of circumstances and that is
a job for the courts. In the Freedom of
Information Act we gave guidance to the tribunal and the courts by the nature
of the exemptions - so some things were not exempt, some things were completely
exempt. On other things, for example,
matters under policy consideration, that is a guidance to the courts and they
have to make the judgment.

Q988 Rosemary
McKenna: The Committee has received a lot of evidence
on the recent phenomenon known as libel tourism, where foreign nationals use UK courts to
sue non-UK companies or individuals for libel.
Should the Government issue statutory guidance on jurisdiction in those
circumstances?

Mr Straw: As the Committee will know,
Chairman, there has to be some connection with this jurisdiction otherwise the
court will not hear it. I think it was
before your Committee that one of the witnesses was asked for details about the
number of cases which arose and the answer was that you would wish the data to
be obtained from the court service. If
that is not already in hand, I will make sure that it is. There are criticisms of our defamation and
privacy jurisdiction. One is that it is
very expensive - and until the opposite is proved, that is also my view. The second is about so-called fraud
shopping. On that I have yet to be
convinced that there is a significant problem.
I am not ruling it out; I just want to see what the evidence is. Some of us face situations where people have
a bee in their bonnet in a particular case, they think they have been unfairly
treated, but when you go to it you find that, although they may have some cause
for concern in that case, it does not make an argument for a change in the
general law.

Q989 Rosemary
McKenna: We were given evidence that a case was based
on a book published in America,
brought by a Middle Eastern businessman with Irish citizenship which was heard
in the UK
courts.

Mr Straw: And only 23 copies of that
book were published in this country, as I understand.

Q990 Rosemary
McKenna: But then it is in case law, is it not?

Mr Straw: On the face of it, the
circumstances of that case were something of a surprise to me. Picking up something the Master of the Rolls
said about the media strategy of the courts, I have always found it wise to
read the small print of judgments before rushing to comment on them
myself. Sometimes you find there s a judgment
at court which, even after you have read every word, remains slightly eccentric
in your opinion, but usually, whether you agree or disagree with it, you think
there is a good argument here.

Rosemary McKenna: We are looking forward to
reading the evidence of cases.

Q991 Chairman:
You
say you are not persuaded necessarily that there is a problem here. Are you concerned that the US Congress is
about to pass law effectively allowing American courts to overturn UK court
judgments?

Mr Straw: The American Congress,
subject to the other states of that realm, is sovereign in these areas. We
could do the same here, if we wished, to make judgments unenforceable abroad in
this country. I do not have any
particular comment on that.

Q992 Chairman:
Obviously we could, but is it not a matter of
concern that this has already been passed in New York and Chicago, I believe, and now in Washington? Congress is essentially saying that they no
longer have faith in the UK
courts and the judgments they are reaching.

Mr Straw: There is a reputational issue
about defamation proceedings in England
and Wales. I cannot speak for Scotland. Part of that is to do with the costs. Let me say there is a reputational issue
in other areas of proceedings which are equally of concern to me. Say in medical negligence, the costs which
are payable to the plaintiffs are typically on an upward trajectory and very
difficult to control within the existing system, whilst the defendants' costs
can be controlled, not least by a proper client/lawyer relationship and bidding
them down. There is that problem. I
would simply say, Chairman, on this issue of fraud shopping that I have
not seen sufficient evidence myself at the moment to suggest that there is a
major problem here, but I await, amongst other things, your Committee's
response on this because you will have the evidence, and you have seen a lot
more evidence than I have.

Q993 Chairman:
I do
not think it is about costs.

Mr Straw: I understand your point.

Q994 Chairman:
We
talked to lawyers in New York
and in Washington,
and the concerns they express are very serious.
They are essentially saying that the Act became known as the "Libel
Terrorism Act" because it was being used, they said, to protect people who were
financing terrorism from exposure. The
book by Rachel Ehrenfeld was going to reveal the links between a particular
Saudi businessman and al-Qaeda and it was his attempt to use the UK courts to
suppress that which meant it was quoted in America as being libel
terrorism. Surely that must be of some
concern to you. That is a view being
taken by legislators across America.

Mr Straw: Of course it is of concern,
but it is also the case that the substantive law in America in some of these areas,
because of the First Amendment, is different and their perspective is
different. I do not know the details or
the evidence against this Saudi businessman.
I am all in favour of people against whom there is overwhelming evidence
of involvement in terrorism being named.
I am not in favour, unless it is a really serious charge, of media organisations
effectively convicting people of terrorism.
I think the bar has to be pretty high if what the media is seeking to do
is to make the most substantial allegations of terrorism against somebody. But I say I am open to look at what you have
to say.

Q995 Chairman:
Is
the British Government making any representations to the US Government about
the measures that are currently under debate in Congress?

Mr Straw: I have not myself seen any
instructions. I will check on that
because it could be that elsewhere in the entirely seamless system of British
Government this has happened. It is not
within my knowledge or that of my officials.

Q996 Paul
Farrelly: On this point of libel tourism, there is one
step that the UK could take which would rule out some of the more extreme
cases, which is to move on with the times and the internet and move on from the
Duke of Brunswick and the institute of single publication. Mr Justice Eady, in one recent judgment
allowing jurisdiction here, said that in due course an international agreement
might be reached as to the appropriate way of resolving claims arising out of
internet publication. But we do not need
international treaties; we could institute that into UK law as one sensible step, would
you not think?

Mr Straw: I am about to publish a
consultation document on defamation and the internet - we will certainly
publish it before the summer recess - which can deal with this issue, and it
also deals with issues of liability of the internet service providers - this
problem which these days is repeatedly raised by the media of so-called repeat
publication by online archives. We are
having to consider this ourselves in the context of online access to court
data, to convictions - which I am very keen on, because I think that the public
have a right to know whether X or Y has not only gone to court but what
happened, but of course there is then an issue of proportionality about
how long that stays on immediately accessible to a far greater degree than it
would be just in the files in the public library.

Q997 Paul
Farrelly: Clearly there is a focus on the problem and
that is very welcome. There is a second
issue to do with jurisdiction. We have
received evidence not only from media companies but from very serious non
government organisations that the UK libel laws, because of the
potential for forum shopping, are having a very restrictive effect on what they
can publish. I will give you an
example. Here in the UK, of course,
any minor council document attracts qualified privilege.

Mr Straw: Council? Local authority?

Q998 Paul
Farrelly: Pronouncements by local councils, individuals,
but there are non government organisations that cite the findings of serious
panels from the United Nations about the activities of arms dealers, for
example. There is one very well-known
arms dealer, whom I will not name under privilege here but I have asked you
about him in relation to Zimbabwe
when you were Foreign Secretary years ago, and action has since been taken by
him, but that sort of individual has the facility to suppress some of the
legitimate activity of NGOs. There is a clear issue here. Clearly it can be addressed by statutory
protections for responsible journalism, responsible publications, but there is
not just a reputational issue. From the evidence we have had it is a
substantive issue for the work of serious organisations.

Mr Straw: I accept what you say. Again I will await your inquiry. You are going into aspects of the operation
of the law of defamation as well as of privacy, frankly, in greater detail than
I have done. Funnily enough, I have
considerable faith in making Parliament work better. If we end up in a position where your
Committee, Chairman, has initiated a series of changes which we then accept and
get into legislation, I think that is a good way of handling it. All I need is the evidence. I had the evidence on the CFA thing, so I
acted. The evidence is there. That issue, although it does not for a second
mean that it is not an issue, has not happened to have been raised with
me.

Q999 Philip
Davies: Following on from where Paul was, the biggest
difference, of course, for America and Britain is that they place much higher
weight to freedom of speech, and that is reflected in their libel laws, where
the burden of proof is the other way round in America compared to Britain. It is something I would like to see, but,
given where the burden of proof is, is it not a surprise to you that, given
that the onus in our system is on the defendant to prove that what they have
said is true, and the claimant has no burden of proof at all, the legal fees
for the defence side tend to be considerably lower than the legal fees on the
claimant's side? Would you not think,
given it is the defence side which has to prove everything that they have
printed is true, that their fees would be higher?

Mr Straw: I do not make any comment on
the hourly rates or overall fees charged by the lawyers for the defendants,
except to say that there is or should be a broad equality of arms between the
newspaper organisation and the solicitors' firm with whom they strike a deal
over costs. And they can control
it. And I think they do - not least by
saying, "If you continue to charge costs of this scale, we will move our work
elsewhere." This is happening now in
respect of NHS litigation. The legal
firms on the other side are in a very different position. They face none of that kind of natural
economic pressure to keep their costs down from their client because the client
has agreed a CFA arrangement with them.
This document, as you know I basically agree with it. I have no comment
to make about the level of fees for defendants, but I think that the level of
fees for plaintiffs' lawyers is too high.
That will remain my view unless and until they are able to advance a
case to your Committee or to me, based on the public interest, for them to
continue to charge rates at this level, with the uplift at this level. I am not yet convinced.

Q1000 Philip Davies: Again that is encouraging. I certainly view, according to the comments you made earlier, that this,
probably above all else, is having a chilling effect on journalists, in that
they are becoming reluctant to print stories that they probably should be
printing in the public interest as a result of it. But when we spoke to our eminent judges
earlier, they seemed to indicate that there did not seem to be sufficient
evidence upon which to act. We put it to
them that a vast proportion - we heard 98% - of CFA cases were victorious. They
only failed in 2% of cases, but they said that they did not have any
evidence. From my recollection of what
they said, they seemed to be encouraging the Government to find the evidence of
this kind of thing, so that decisions could be made with all the facts in front
of us. Does the Government plan to
commission work to get the evidence of how CFAs are working in practice?

Mr Straw: In defamation cases?

Q1001 Philip Davies: Yes.

Mr Straw: The evidence has been
presented jointly by the Society of Editors and the Newspapers Society, who did
a long schedule of known CFA cases. I do
not think it was completely comprehensive and there has been further discussion
between Lord Justice Jackson's staff, as I understand it, and the media
organisations. I think where we will get
to is that there will not be a huge argument about the data, there will be
debate about what is reasonable. My view
is this: first of all, in quite a number of cases, not in every case - which is
what the plaintiffs' solicitors say - the ratio between the awards of damages
and costs is very significant, not to say astonishing. In the case which we quote on page 7 of this
document, the Daily Telegraph Group,
who were awarded damages of £130,000, was significantly less than
the claimants' costs, whose base costs alone, that is before uplift, were
£317,000. Just picking up your point, I
am as certain as I am sitting here that the very high risk of costs does have a
chilling effect, particularly on the regional and local media. It is for them to give your Committee details
if they have not already done so, not for me.
In a matter involving one of the Lancashire newspapers - not, let me
say, the one that circulates in my constituency - where they offered an apology
for what at worst was a simple mistake and an innocent mistake, they face not
only having to pay damages but ridiculous costs, because in the end they
decided they had to quit because they were going to be at risk of more
costs. That is not the purpose of a CFA
arrangement. A CFA arrangement is there
to ensure better access to justice; not that if people are inadvertently
subject to some mistake which can be corrected they can then go in for a
lottery.

Q1002 Philip Davies: Is your main concern about CFAs the success
fee, in the sense that the Master of the Rolls said that the success fee was
there in order to cover the cost of cases that they lose? But if, as seems to be the case from the
evidence that I have heard, they tend to go on CFAs when they think they have a
case which is a racing certainty, which they could not possibly lose, so that
there is no risk and they are, therefore, in effect, earning up to double for
the easiest possible cases to prosecute, that seems to me to be sort of some
kind of a racket and an abuse of what was intended. Is that your major concern about the CFAs?

Mr Straw: I would like to refer you to
the questions that we ask in the consultation document, which are about, for
example, whether you introduce a maximum recoverable hourly rate and whether
you have cost capping in every case or just in some. There are also questions about the issue of
after the event insurance, including its prior notification to the other side,
whether there should be a proportionality test to total cost, not just base costs,
and also the scope of CFAs as a whole.
We are now just past the closing date and we are currently assessing the
responses to these consultations. That
is where we are. But those are key
questions, it seems to me.

Q1003 Philip Davies: To be topical, do you fear that they may be
sticking to the letter of the rules of CFAs but not necessarily to the spirit
of the rules?

Mr Straw: I am sorry, who are "they"?

Q1004 Philip Davies: The lawyers who are taking these cases under
CFAs, that they think they do not have a possible chance of losing.

Mr Straw: What happens in all sorts of
areas in litigation is people seek to push their advantage. They want to win. I used to earn an honest penny by that
approach. The blunt truth is that if you
are faced with a prospect of wining through some literal or casualistic
interpretation or losing on the basis of conceding the spirit of what is behind
that particular provision, your client would expect you to go for the former.
That is how it is. What you have to do
is to make sure the rules are pretty robust.

Q1005 Paul Farrelly: Clearly I am so biased that I read some of the
questions in this excellent document as rhetorical questions, because the
answers are so blindingly obvious.
Perhaps that was the spirit in which it was intended.

Mr Straw: Not quite. I would not have decided to issue the
consultation in advance of and in parallel with Lord Justice Jackson's review
had I not thought that there was a particular mischief that needed to be dealt
with. And I wanted to get on with it, so
I was satisfied that the media organisations and others made a case. I have yet to see the results.

Q1006 Paul Farrelly: This document is clearly about CFAs and
defamation and this is the focus of our inquiry. Just so that we can take evidence on this and
we do not lose the perspective on the wider application of CFAs, could you say
a few words about your concerns about CFAs and their effect in the NHS and
medical proceedings, just to give us some perspective?

Mr Straw: Generally, one of those
responding gave this answer in earlier evidence. CFAs, on the whole, have worked to improve
access to justice in the context in which civil legal aid for these areas was
removed. There was never civil legal aid
for defamation but there was, for example, in areas of personal injury. You do not want, therefore, to throw the
baby out with the bathwater. On the
other hand, what concerns do I have? I
think there is a particular problem in medical negligence cases of the interaction
of the availability of legal aid with CFAs, which is the only area,
essentially, of personal injury, in its widest sense, where legal aid is
available. We have to be very careful
here. It was decided ten years ago not
to exclude medical negligence cases from legal aid when all other PI cases were
being excluded, because the number of medical evidence cases was rather fewer
and the law was being developed and so on.
Nobody wants to see an applicant of low means who has suffered
egregiously under the hands of the NHS being denied access to justice. The interaction of those two is something I
am looking at with some care. There is a
wider issue about CFAs which is basically to do with the same issues as raised
here, levels of hourly rate and levels of uplift and advance information of
ATEs. Lord Justice Jackson is getting to
grips with that and I look forward to his report.

Q1007 Paul Farrelly: Just so that we can have a perspective, the
operation of CFAs is a serious issue in defamation.

Mr Straw: Yes.

Q1008 Paul Farrelly: Just as a statement, it is a serious issue
within the medical field as well.

Mr Straw: It is not the principle, but
it is the practice.

Q1009 Paul Farrelly: It is the effect.

Mr Straw: Yes. There is one other area. Either yesterday or today I told the House
that I am going to take legislation to statutorily control contingency fee
arrangements. These contingency fee
arrangements are currently unregulated.
They are the ones which are being used by certain solicitors' firms in
respect of employment tribunals, particularly equal pay arrangements, where
local authorities and trade unions have come to an arrangement, say, over equal
pay and phasing it in, and then the lawyers acting for individuals have sued
local authorities and sued the trade unions as well. These fees, for reasons to do with an anomaly
in interpretation of the law, are currently totally unregulated, so I am going
to deal with those.

Q1010 Paul Farrelly: Your case with your Lancashire
newspaper seems to be one particular case of which you are aware where the
offer of amends procedure is clearly not working as it should. Another case we have taken evidence on is the
case of Tescovthe Guardian where the Guardian
went through so many hoops, the like of which I have never seen as a former
journalist, and clearly it did not work then.
What consideration have you given to how the offer of amends procedure
might be changed to give the swift and less costly redress that was intended?

Mr Straw: I certainly think that needs
to be looked at and actively considered. That was one of the surprises in this Lancashire newspaper case. Obviously I did not know all the
details. I only had the explanation
as the newspaper and the Society of Editors had put it to me, not the other
side, but it did seem pretty odd.

Q1011 Paul Farrelly: Coming on to responsible journalism again,
there are different ways of cracking the nuts.
In the Tesco case, the Jameel defence was not employed
because they did not think it would work.
They got the tax wrong but the thrust was right. It turned out that the company was
aggressively avoiding the tax through additional evidence anyway. In the States, of course, Tesco might be
considered a public figure and that sort of lawsuit would not be possible. Australia has
gone further than the quarter-way house that we have; it has taken
a different step, when it reformed its libel and defamation laws, of
saying that certain bodies with employees of more than ten cannot sue, although
individuals can, and they have to go over certain hurdles. What would be the advantages and
disadvantages in your opinion of an Australian law?

Mr Straw: The advantages from the point
of view of the media organisation would be obvious. They would escape liability in all
circumstances. But bodies corporate do
have reputations and on their reputations depend the livelihoods of, in large
corporations, thousands of people and their share price, in which your pension
fund or mine might be invested. I am
aware, just, of the bare bones of what has happened in Australia, and
I think we should always look at parallel examples but I would need a really
strong argument in favour to move on that.

Q1012 Paul Farrelly: Do you think that public figures should be
required to face additional hurdles in defamation cases?

Mr Straw: They are in practice. And privacy as well. I do not complain about this, for the
avoidance of doubt, but the level of detail, for example, which is now
available about our expenses is not available/could not be made available in
respect of almost anybody else in British society. That is just true. That is something you have to accept. It goes with being an elected
representative. If you are a senior
minister, you work in a goldfish bowl. Maybe that is just life. My concern has never been about myself so
much, although I think that if you, as I seek to do - I do not parade my family
but keep them in the background - but if you do parade your family then I think
it is tough - you are entitled to some privacy yourself as far as your family
life is concerned. I think one's own
family, in any event, is entitled to privacy unless they are adult and they
volunteer for public life. As a matter
of fact, on that I think the papers are gradually getting better rather
than worse, but it is very important that members of family of people in public
life, not least MPs, are protected.

Q1013 Alan Keen: Why did you not intervene to defend Mr Justice
Eady against Paul Dacre's when his attack on Mr Justice Eady was generally
accepted to be inaccurate anyway?

Mr Straw: My duty, indeed I swear an
oath - three oaths altogether - to this effect: to uphold the integrity and
independence of the judiciary. If I had
judged that that was being significantly challenged in this case, I might have
said something but I did not judge it necessary, and it is certainly not my
role to provide a running commentary on particular judgments which may or may
not be controversial. Indeed, that would
then be to do exactly that which I am not supposed to do, which is, as it were,
to second-guess what the courts have done.
At the moment, if I had said anything about that case - in any event, it
could have gone to appeal - I would have been interfering in essentially an
argument between a court who happened to find on behalf of the plaintiff and
the defendant newspaper (News International) and those who were supporting
it. I think it is entirely appropriate
in a case like that or loads of other cases for me not to offer a running
commentary. It is different if you take
criminal cases. Sometimes you get
judges or magistrates being criticised for bail restrictions, for example. If I think it necessary - and I have in the
past - I have gone out and said they may, as it transpires, have made the wrong
call, but this is an impossible task that we are expecting people to do, to
predict the behaviour of people on risk factors which they do their best
on. You can never be certain that if you
put an offender on bail or a defendant, he is not going to commit a
further offence. I judge it on the particular facts.

Q1014 Alan Keen: I can recollect that two lawyers agreed, when
we put this question to them earlier on in the inquiry, that the law possibly
should be changed, although it would be difficult. This is in the course of newspapers whose aim
it is to sell newspapers, so the headline and also the introductory paragraph
might indicate one thing to the public and, as long as further down they put
that there was nothing wrong, nothing illegal, that means it is fine - and it
does not matter how misleading the headlines or the introductory paragraph are.
Two lawyers said they thought that the law should be changed so that that could
be taken into account. The main thing was that the public were misled on
purpose by the newspaper. Paul Dacre
said, by the way, that the Daily Mail has never done that to his
knowledge.

Mr Straw: If there is argument about
whether or not it is defamatory, it would be the article as a whole that would
be taken. If in screaming headlines it
says, "XYZ is guilty of these crimes" and he is accused of being a terrible
person and then you get to the bottom of page 23 and in tiny type it says, "XYZ
denied this and we do not have any evidence to prove it," of course it would be
defamatory. As I have said earlier in
answer to one or two questions, I look to see what your Committee says,
Chairman, but I think it would be pretty difficult to try to come up with some
mechanical rule which in advance of a particular case distinguished between
what was said in the headline and what was said in the body of the story. How these things are judged in practice is
that you look at the story and think, "What would any normal reader - the man
on the Clapham omnibus - take away from this?"

Q1015 Alan Keen: It seemed to be accepted that up until now
that was okay.

Mr Straw: I am not saying it is okay,
but I am saying that of course headlines can be defamatory. I am not a defamation lawyer, but I am quite
certain that if a headline was outrageously defamatory, the fact that later
down in the story it said words to the effect, "Oh, by the way, we don't think
this is true," or "It's only an allegation" would not be much of
a defence. You can show that the
headline was malicious, apart from anything else, and get exemplary
damages. This note says: "The House of
Lords indicated in the 1995 case of Charleston that, although the
question of whether the text of an article is sufficient to neutralise an
otherwise defamatory headline is a matter for the jury, a claim for libel
cannot be founded on a headline or photograph in isolation from the related
text and the question of whether an article is defamatory has to be answered by
reference to the response of the ordinary, reasonable reader of the entire
publication." That, really, is what I
said.

Q1016 Alan Keen: I was shocked when I received the expenses
detail that the Telegraph are alleged to have bought to find that it
included some of my staff's bank details.
Who should care about that? Has
any action been taken to make sure that the Telegraph is caring to keep
that information?

Mr Straw: Because the Daily
Telegraph has the unredacted details, they will have access to a lot of
information. As far as I know they have
been extremely careful not to publish any of that detail. They have no interest, financial or public
interest, in making any of it available.
I am told that the Information Commissioner is in touch with the
House authorities about this, because clearly there are various obligations
under the Data Protection Act - which I am pretty certain the Telegraph would
be well aware of.

Chairman: I think we are in danger of
straying into an area which would keep us here for another two hours. On that note, I would like to say thank you
very much.